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The vice-chancellor of the University of Northampton believes that its plan to become the UK's top university for social enterprise will give it a considerable advantage in the student-recruitment market - once the public realise what "social enterprise" means.

Nick Petford, who launched the university's five-year social enterprise strategy at the House of Lords this week, told Times Higher Education that Northampton hoped within five years to offer all its undergraduates the opportunity to work in a social enterprise wherever appropriate - although it would not be compulsory.

He said the university would also use its increased Higher Education Innovation Fund allocation to provide seed funding for individuals both inside and outside the university to set up social enterprises: non-profit, self-sustaining businesses engaged in good causes, such as recycling computers or running health-related services.

Earlier this year, Northampton teamed up with The Young Foundation to recruit the sector's first "social entrepreneur in residence", Wray Irwin, who will scour the university for ideas for establishing social enterprises.

Professor Petford said that the strategy built on grass-roots volunteering and social enterprise activity that was already happening at the university when he arrived last September. He explained that it reflected "a genuine ideological commitment to the importance of civic engagement by universities". He added that he hoped Northampton would become a "point of leadership" for local social enterprise activity.

This commitment was reflected in the institution's being named alongside University College London as the UnLtd/Higher Education Funding Council for England Outstanding HEI Supporting Social Entrepreneurship, he said, an accolade received on 16 June.

The vice-chancellor hoped the move to further promote practical social enterprise activity and put it "front of house" would also differentiate Northampton from other universities and eventually help to recruit students. But he admitted that the first task would be to educate people about what "social enterprise" meant.

"It is a bit of a bold move to go out on a point of differentiation around a couple of words most people aren't particularly familiar with, but it illustrates that we are not being cynical about this strategy and are here for the long run," he said.

Professor Petford also hoped the timing of the launch event during Universities Week would provide a "good news story" about the sector's civic engagement.

The adoption of the social enterprise strategy was not an attempt to play up to the government's "Big Society" agenda, he said, insisting there was "clear water" between the two, with the former being "a way for universities to engage with society that is apolitical".

He added that the university would respect the right of its academics to challenge the idea of social enterprise "where it might be inappropriately applied".